KRA bid to enforce tax compliance using iTax stalls

Kenya Revenue Authority staff serve customers at the Nairobi iTax System Support Centre. [Standard]
Kenya Revenue Authority (KRA) is yet to strike off five million taxpayers who had not regularised their details on its online platform by 2017.

The taxman had given individuals and businesses until the end of August 2017 to feed their details into the iTax platform, failure to which their Personal Identification Numbers (PINs) were to be removed from the system.
KRA, however, says it is still in the process of finding out the PIN holders who have not been registered on its iTax system as it moves to enforce compliance.
“Whereas we have initiated tax base expansion, KRA is also cleaning the taxpayer register to identify PIN holders that have either been restructured, wound up or no longer operational as well as those who may not necessarily be taxpayers but who only obtained PIN to facilitate their access to services,” said KRA.

The taxman said the deactivation of PINs outside iTax is a normal compliance activity aimed at ensuring that all PIN holders fulfil their tax obligations. “Before this is done, due diligence is done on a case-by-case basis in view of the tax exposure posed by the identified non-compliance,” said KRA.
The taxman has over the last two years intensified the recruitment of new taxpayers as it moves to widen its tax base, netting almost three million new taxpayers to put the total number of Kenyans with PINs at 13 million.
However, a huge chunk remains outside digitally monitored iTax platform. Of the 13 million PIN holders, KRA said, only 8.9 million are registered in the iTax portal, up from 5.8 million in 2017.

Analysts say Treasury has been using KRA’s numbers of potential taxpayers in their models to predict revenues even though a huge number, including students, the jobless and pensioners, cannot pay taxes.
“Basing collection on the number of taxpayers more than growth is a bad thing because even students require PINs to access loans. If you use this to asses revenues, then projections will be fundamentally flawed,” said Christopher Kirathe a partner at Ernst & Young.